Medical records and insurability

[FlogBlogger]

Let's say you are transitioning to ER and intend to switch carriers. How exhaustive is the testing to qualify for coverage? If you pass, is that the end of it? How deep does the carrier research your history--do they sift through your entire file from previous physicians?

NOT that I have any condition to hide. I'm just cautious, to the point of considering paying out-of-pocket and keeping physicals "off the books" from potential carriers, in order to maintain eligibility.

Is this extreme?

 

[chinaco]

Not sure about the underwriting rules for specific companies. They are different for each company... although, there is a fair amount of industry consistency in underwriting rules. That said some insurance companies will take on more risk than others. For the insurance company, it is all about balancing/managing the risk vs potential profits.

I would be more concerned about entering into an agreement with a company that will pay up when you have a medical problem.

Think about it... You do not need health insurance until you actually need it... then you cannot get it. If you have a serious condition, you will pay through the nose. My advice is to get a policy from a reputable company if you are healthy. It could save you from financial ruin. Of course, there is no guarantee that they will not drop you at the next policy period if you develop a serious and/or chronic problem.

I know that you can keep costs down by using a high deductible plan.... past that bit of advice, there are probably others on the board that can offer more insight into individual health policies.

Anyway... Most (or all) insurers share information. The Medical Information Bureau aggregates this type of information. You signed away rights to the information when you entered into an insurance agreement. Insurer use teh MIB and other sources of information. They will want to check with your phsycian. I know in life insurance, for certain face amounts, they will make to get an exam by a doctor that the insurance company chooses.

http://www.mib.com/


A final note: (and I am not targeting this response towards you, rather as a word to the wise for all) - Do not make false statements or try to hide information when applying for a policy. If it is discovered, it will make your policy null and void. Thereby defeating your original goal. Even things like hiding about tobacco use in the past...

 

[FlogBlogger]

Thanks for that, china. MIB was the missing link, for me.

And your warning is duly noted. No, I am not trying to defraud the insurance company. Rather, I'm just trying to learn the rules and level the playing field. I'll then decide what size prison cell I'm willing to risk entering, as my accountant likes to say....

 

[Gotadimple]

Your state insurance commissioner can provide you with the details about what to expect. They are in charge of regulating the insurers, and they are also the ones who make the rules.

Most Office of Insurance Commissioner have a toll-free line you can call and they can advise you.

-Rita

 

[mykidslovedogs]

NOT that I have any condition to hide. I'm just cautious, to the point of considering paying out-of-pocket and keeping physicals "off the books" from potential carriers, in order to maintain eligibility.

I wouldn't even think about fraudulently failing to disclose any information. If the insurance company decides to investigate a claim, and they feel that they have enough evidence that you purposefully failed to disclose a pre-existing condition, then they can "rescind coverage", give you all of your premiums back, and cancel the policy as if it never existed.

Let me give you an example. Let's say that you decide to buy some insurance because you have a suspicious mole you want looked at and you are pretty sure that it might be a malignant melanoma. If you do not disclose that you had symptoms of a suspicious looking mole on your application, and two weeks after obtaining your policy you are diagnosed with malignant melanoma, you will be looking at grounds for the insurance company to rescind your coverage. You do not buy insurance in anticipation of immediate need. You should be purchasing it as protection against future, unknown events.

Insurance companies CANNOT cancel you just because you have a large claim. It's not like car insurance. Personal health insurance is guaranteed renewable once you are accepted for coverage and you can never be cancelled just because you get sick. They also can't raise your rates based on your PERSONAL claims experience. Rather, each year or sometimes every 9 months or so, they will look at the claims history of large groups of members and they will also take into consideration overall inflation in the healthcare industry, and they will and CAN give rate increases based on this information. They can also increase rates based on your age as you get older. They cannot legally cancel you or try to price you out of the market just because of your personal claims.

 

[chinaco]

Insurance companies CANNOT cancel you just because you have a large claim. It's not like car insurance. Personal health insurance is guaranteed renewable once you are accepted for coverage and you can never be cancelled just because you get sick. They also can't raise your rates based on your PERSONAL claims experience. Rather, each year or sometimes every 9 months or so, they will look at the claims history of large groups of members and they will also take into consideration overall inflation in the healthcare industry, and they will and CAN give rate increases based on this information. They can also increase rates based on your age as you get older. They cannot legally cancel you or try to price you out of the market just because of your personal claims.

I am not sure what the state laws dictate... in all states. However, Insurance companies do cancel policies and get away with it. Unfortunately, when you are on the ropes, it is the worst time to try to fight a legal battle.

Bottom line: if you buy health insurance... you would be best advised to purchase from a company that pays claims and does not have a track record of cancelling policies (regardless of whether they are supposed to do it or not). Will some companies stonewall you when you are down... you betcha. Do your homework!

 

[FlogBlogger]

... you would be best advised to purchase from a company that pays claims and does not have a track record of cancelling policies...

China, do you have a public source from which to gain such information? Thanks.

 

[REWahoo]

China, do you have a public source from which to gain such information? Thanks.

Most states maintain records of consumer complaints filed against each insurer. When viewed as a ratio to the number of individuals the company insures in the state, it can provide good comparative information. Here is a sample of the information provided by the Texas Department of Insurance:

http://www.tdi.state.tx.us/consumer/cpahci06.html

 

[FlogBlogger]

Thanks wahoo!

 

[chinaco]

I have not had to check this out since I have always been covered by a group plan. My first stop would be to check with your state insurance commisioner to see if they have any statistics on complaints filed against companies that do business in your state. They do have the info... if they will not share the information, they may be able to direct you to some group that keep track of that type of info. The Ins commisioner is the one you would go to to file a complaint against an ins company. The other source would be law suits that were filed. I think that when complaints are filed, they are public record.

If you dig, you will find the information.


You might try consumer reports. they tend to do surveys on goods and services.

http://www.consumerreports.org/cro/cu-press-room/pressroom/eng0509hlh.htm?resultPageIndex=1&resultIndex=7&searchTerm=health insurance

http://www.consumerreports.org/cro/health-fitness/health-care/hmos-vs-ppos-905/overview/index.htm

http://www.consumerreports.org/cro/health-fitness/health-care/hmos-vs-ppos-905/ratings/hmos/index.htm

http://www.consumerreports.org/cro/health-fitness/health-care/hmos-vs-ppos-905/ratings/ppos/index.htm

 

[Martha]

Insurance companies CANNOT cancel you just because you have a large claim. It's not like car insurance. Personal health insurance is guaranteed renewable once you are accepted for coverage and you can never be cancelled just because you get sick. They also can't raise your rates based on your PERSONAL claims experience. Rather, each year or sometimes every 9 months or so, they will look at the claims history of large groups of members and they will also take into consideration overall inflation in the healthcare industry, and they will and CAN give rate increases based on this information. They can also increase rates based on your age as you get older. They cannot legally cancel you or try to price you out of the market just because of your personal claims.

Mykids is right that under federal law, individual insurance is for the most part guaranteed renewable and a policy cannot be cancelled based on filing a claim. However, it is a state issue as to whether an insurance company can raise your rates based on your claims experience or age. To check rights under your state's law look at the Georgetown guide at www.healthinsuranceinfo.net.

Even though policies are guaranteed renewable, there are exceptions to this guaranty. For example, the insurance company can terminate the plan for everyone in the plan. In that case, the company could require everyone to re-apply for a new plan and refuse coverage to those who don't meet their underwriting standards at the time. Also, temporary insurance is not guaranteed renewable--don't buy it unless you have to.

 

[simple girl]

Even though policies are guaranteed renewable, there are exceptions to this guaranty. For example, the insurance company can terminate the plan for everyone in the plan. In that case, the company could require everyone to re-apply for a new plan and refuse coverage to those who don't meet their underwriting standards at the time.

Hmmm...it doesn't sound like the guarantee is much of a guarantee. I wonder how often the insurance company gets one person in a plan who develops, say, cancer, so they terminate the whole plan to get rid of that expensive case?

 

[FIRE'd@51]

Even though policies are guaranteed renewable, there are exceptions to this guaranty. For example, the insurance company can terminate the plan for everyone in the plan. In that case, the company could require everyone to re-apply for a new plan and refuse coverage to those who don't meet their underwriting standards at the time.

IMO, this is perhaps the biggest risk one faces in the individual insurance market. Even if you are healthy when you initially buy your coverage, if the insurance company decides to exit the individual insurance market in your state, you may not be able to get affordable coverage if you have developed a "pre-existing condition" in the interim. You can have paid the premiums for many years, and then when you need the insurance, it is gone.

 

[FIRE'd@51]

Hmmm...it doesn't sound like the guarantee is much of a guarantee. I wonder how often the insurance company gets one person in a plan who develops, say, cancer, so they terminate the whole plan to get rid of that expensive case?

I believe it usually works in the following way. As people in the initial risk pool age, more of them get sick. The insurance company raises premiums disproportionally for that class of policyholders (since they are sicker). The healthy in that pool switch their insurance to another carrier, leaving the original pool "sicker". This vicious spiral continues until the carrier finally decides to cancel all the policies (often by exiting the individual insurance market in that state). Many people at this point are forced into state risk pools or other guaranteed-issue insurance at much higher premiums (if they are lucky enough to be able to get insurance at all).

 

[mykidslovedogs]

All I know is that, at least in my experience, we have not had any carriers just drop out of the market because their membership starts getting older or "sicker". One cancer case is not going to drive a Blue Cross and Blue Shield out of business. On the other hand, a carrier like "Mega Life" or "Midwest National Life of Tenessee" might be a different story! Buyer Beware! When you buy insurance, you want to make sure you are purchasing from a reputable carrier that has been in business for many, many, many years. I have been in the business for over 10 years now, and I have never seen any of the carriers I work with drop out of the individual market.

I would have to research futher with regards to State law on rate increases based on personal claims. At least in Colorado, I have never seen any one individual be singled out for a rate increase based on claims. Rather, the carriers take rate increases on a large scale at renewal time, based on the claims experience and overall industry inflation trends based on large groups of members. When you get your insurance card, even in the individual market, you will see both a "subscriber number" or "member number" and a "group number". Your group number is related to the "group" of members who purchased insurance around the same time as you did. It is the demographics of this "group" that the insurance carriers base renewal rate increases on.

I would be really surprised to find any State that would allow an insurance company to single a particular person or family out for huge rate increases based on personal claims. Maybe Martha could give me some more information on that. I am curious now....honestly, I have never heard of that.

Note: I can see an individual carrier dropping out of the market in your state if they are mandated by the State or if a law is passed regarding guaranteed issue or community rating. It is these kinds of mandates that drive insurance companies out of business. No, one or two cancer cases is not going to drive an insurance carrier out of business.

 

[FIRE'd@51]

MKLD,

Could you speak to the Mutual Of Omaha case? They are a "well-respected" company that decided for "business reasons" to completely exit the individual insurance market in all states, and canceled all of their existing policies, leaving many of their long-term policy holders who weren't Medicare eligible "high and dry".

 

[MileKing]

I believe MIB only has information if you have applied for INDIVIDUAL health insurance within the last seven years. So if you have always been covered by an employer's health plan, MIB will not have any record on you.

 

[mykidslovedogs]

Actually, I can't speak for them (Mutual of Omaha). I don't think they did business in the State of Colorado (where I am licensed), because I have never had their individual products available to me. How many states did they do business in? I am curious to find out more....

Were you one of their members? What state do you live in?

I always thought Mutual of Omaha was more of a specialist in Medicare Supplement type policies....

I'll do some research, and I'll let you know what I can find out.

 

[mykidslovedogs]

MKLD,

Could you speak to the Mutual Of Omaha case? They are a "well-respected" company that decided for "business reasons" to completely exit the individual insurance market in all states, and canceled all of their existing policies, leaving many of their long-term policy holders who weren't Medicare eligible "high and dry".

I've been doing a little research, and my opinion on this is that Mutual was likely forced by government regulation to leave the market. Here is a comment from one of their spokesmen...

"Nolan said state governments require more than 1,000 specific medical coverages on policies sold in their states, and many have agencies that control premium rates that companies can charge." ...."ill-advised legislation and policy played a significant role in creating the situation we face today." ....."Mutual of Omaha delayed this decision as long as possible," Nolan said, "staying in this market longer than most of our peers and working proactively on the legislative, regulatory and product fronts."

When a government MANDATES that an individual health insurance company MUST cover certain things or that they MUST charge a certain rate....ie..community rating...., these kind of mandates cause insurance companies to have to operate at a loss, driving them out of business. I am sure that if the individual market would have remained profitable for them, they would have remained in the Market, but Mutual had a large number of clients in states such as Vermont and NY, and when community rating was enacted in those states, IMO, Mutual had to make the decision to leave. They did not have enough business in the other states to remain profitable, so they had to leave altogether.

As I stated in one of my earlier posts, when "community rating" or "price controls" are forced on an insurance company, they will eventually be forced to leave the market. We can't blame the insurance company for that....It is the government legislation and mandates that drive them out of business.

 

[FIRE'd@51]

I've been doing a little research, and my opinion on this is that Mutual was likely forced by government regulation to leave the market. Here is a comment from one of their spokesmen...

"Nolan said state governments require more than 1,000 specific medical coverages on policies sold in their states, and many have agencies that control premium rates that companies can charge." ...."ill-advised legislation and policy played a significant role in creating the situation we face today." ....."Mutual of Omaha delayed this decision as long as possible," Nolan said, "staying in this market longer than most of our peers and working proactively on the legislative, regulatory and product fronts."

When a government MANDATES that an individual health insurance company MUST cover certain things or that they MUST charge a certain rate....ie..community rating...., these kind of mandates cause insurance companies to have to operate at a loss, driving them out of business. I am sure that if the individual market would have remained profitable for them, they would have remained in the Market, but Mutual had a large number of clients in states such as Vermont and NY, and when community rating was enacted in those states, IMO, Mutual had to make the decision to leave. They did not have enough business in the other states to remain profitable, so they had to leave altogether.

As I stated in one of my earlier posts, when "community rating" or "price controls" are forced on an insurance company, they will eventually be forced to leave the market. We can't blame the insurance company for that....It is the government legislation and mandates that drive them out of business.

The problem with this argument is that these "bad" state laws and regulations apply to all other insurance companies who issue Individual Insurance policies, not just MOH. So that means anyone who buys an Individual Insurance policy faces the risk that their carrier will choose to go the same route as MOH. How can one ever have "peace of mind" living under that threat?

 

[mykidslovedogs]

Well,

The problem with this argument is that these "bad" state laws and regulations apply to all other insurance companies who issue Individual Insurance policies, not just MOH. So that means anyone who buys an Individual Insurance policy faces the risk that their carrier will choose to go the same route as MOH. How can one ever have "peace of mind" living under that threat?

Point taken! I guess you can't! I guess my biggest point here is that people are so quick to blame the "evil" insurance companies for leaving the market, when in all actuality, they would have stayed in the market if they could continue to be profitable. Too much regulation forces mandates on these carriers that makes it unprofitable to continue to do business, yet we blame the insurance company for leaving when we should be blaming the legislators for irresponsible legislation. Would you continue to invest in an investment that causes you to lose money just for the common good?

The only thing we can do is encourage our legislators to stay away from "community rating" and/or "price controls", and the the problem won't occur in the first place! I mean, the very problem this legislation is supposed to solve eventually hurts more people than it helps! The short-sightedness always amazes me.